Mandurrago, John, et al. v. City of Carmel-by-the-Sea, et al. (M102802): Petitioner’s/Plaintiff’s Presentation

ABSTRACT: Yesterday, Judge Lydia Villarreal heard oral arguments from Petitioners’/Plaintiffs’ attorney Dennis Beougher and Respondents’/Defendants’ attorney Richard Harray for approximately 90 minutes in Courtroom 15, Monterey Courthouse. The Petitioners’/Plaintiff’s “Presentation” is presented. Importantly, during the proceeding, the Judge articulated that the intent of the State Legislature is for agencies not to use CEQA as a means to deny affordable housing projects. There were no City Council Members, Planning Commissioners or Historic Resources Board Members present in the courtroom. Judge Villarreal took the case under submission and will issue a written decision within 90 days.

Mandurrago, et al. v City of Carmel, et al.
Petitioners’/Plaintiffs’ Presentation

Overview of Plaza del Mar Project
• Application filing date: September 2001

• Project location
Corner of Dolores and Seventh Street, Carmel
Former location of a bank building

• Proposed Project Features
New retail spaces
Underground parking
Demolition of former bank building
7 new residential units, including 2 affordable housing units (subdivision map application)

City Decided Former Bank Building Should Not Be Protected
• C.M.C. 17.32.060

• 5 public meetings

• November 7, 2006: City issued 41 findings and decided NO, building should not be protected by being listed

• Findings included 18 findings under the heading, City Council Findings on Architectural Significance

Carmel Municipal Code section 17.32.060: Should bank building be protected by being listed on inventory of historic resources?

The conclusion in the draft EIR regarding the historic status of the old bank building could not be finalized until the city’s Department of Community Planning and Building took action on the matter, consistent with the procedures established in the City’s Local Coastal Program (LCP). City’s Brief, 3:10-13; AR (Administrative Record) 0894

City’s Demolition Permit Chapter, 17.30/010 protects only buildings listed on the City’s Inventory of Historic Resources.

City Council Findings on Architectural Significance
• Finding #22: “the EIR concluded that the bank is not historic and therefore no requirement existed for the EIR to address non-demolition or adaptive reuse alternatives. However, in response to public requests for such an alternative, the Final EIR included a new project alternative that included the existing bank building into the project design.”
AR0740

Finding 22 from the November 2006 findings

• Finding #27: “...Furthermore, upon demolition, a replacement building of the modern period could be designed that contributes equally to the City’s architectural diversity.”
AR0742

Finding 27 from the November 2006 findings

• Finding #33: “The building is not unique. ... There are other commercial buildings within the Monterey Peninsula area, and within the City limits of Carmel-by-the-Sea, that are designed in the Second Bay Area Tradition of architecture. There are also are other buildings that can be described as ‘heroic’ or ‘monumental’ within the Carmel-by-the-Sea and within the Monterey Peninsula area.”
AR0744

Finding 33 from the November 2006 findings

• Finding #34: “Based on Findings #30 through #33, above, and pursuant to the eligibility criteria for California Register of Historic Resources and the Carmel Municipal Code, the bank building does not embody distinctive characteristics of a type, period, region or method of construction, or present the work of an important creative individual or possess high artistic value, nor does it make an unusually strong contribution to history, architecture, engineering, or culture.”
AR0745

Finding 34 from the November 2006 findings

• Finding #16: “...In addition to above criteria, the Carmel Municipal Code also recognizes that a property can be considered of exceptional importance if it makes an unusually strong contribution to history, architecture, engineering or culture, or because it is an integral part of a historic district. Meeting any one of these criteria is sufficient to qualify a building less than fifty years old as historically significant.”
AR0737

Finding 16 from the November 2006 findings. The City cited as evidence for this the Carmel Municipal Code 17.32.040(H).

This means that even though the building was less than 50 years old, the City understood that it could still have placed it on the inventory of historic resources and protected it from demolition it the City concluded that is was “great architecture.”

Project Opponents Attempt to “Supersede” Earlier Findings
• After two council members who voted not to list the bank building on the City’s Inventory of Historic Resources announced their resignations, the City Planning Commission members trumped up “the loss of great architecture” if the building was demolished, requiring recirculation of EIR.

• A standard of “I know it when I see it.”

The term “trumped up” is appropriate as the City failed and continues to fail, to cite any written standard, ordinance, regulation, policy, or resolution as to how the city determined “great architecture.”

Subsequent Project History
• September 2008: Planning Commission certified the Amended EIR and approved the Project.

• Barbara Livingston appealed approval to the City Council.

• December 2, 2008: City Council upheld the Livingston appeal and made certain findings and determinations that would apply to future City actions concerning Project.

• Petitioners appealed to Court; Court of Appeal heard oral arguments on April 6, 2010. A decision must be rendered by July 6, 2010.

• On December 3, 2010, City Council certified the Amended EIR and also denied the Project, making 20 findings for denial.

Petitioners’ appealed decision to recirculation of the Amended EIR based on “loss of great architecture.” City’s motion after hearing the Petitioners’ appeal was merely a decision to recirculate the Amended EIR.

City Denied Project in violation of Housing Statutes and CEQA
• Housing Accountability Act (HAA)

• State Density Bonus Law (SDBL)

• California Environmental Quality Act (CEQA)

Violations
• December 3, 2009 decision is not supported by the findings.

• Key findings are not supported by the evidence.

• Findings #4, #5, #7, #13, #14, #16, #17, #18, #19 and # 20.

Project is a “Housing Development Project” –subd.(h)(2)(B)
• Finding #17 not supported by the evidence

• Project is a “housing development project”

• HAA definition of an eligible “housing development project:”
“Mixed use developments consisting of residential and nonresidential uses in which nonresidential uses are limited to neighborhood commercial uses and to the first floor of buildings that are two or more stories. As used in this paragraph, ‘neighborhood commercial’ means small-scale general or specialty stores that furnish goods and services primarily to residents of the neighborhood.”
Gov’t Code 65589.5(h)(2)(B)

Three reasons are given in Finding #17 that Project does not qualify.
1) Both the street level shops and the lower level parking garage would be commercially operated as independent businesses.

2) “The project also is not limited to neighborhood commercial uses.”

3) "Further, the applicant is unwilling to limit occupancy of the retail businesses to local, resident-serving uses. Without this limitation, the retail spaces could be occupied by visitor-serving uses otherwise allowed within the District by the zoning ordinance (e.g. art galleries, jewelry stores)."

Project is an eligible “housing development project”
1. City’s existing zoning district designation for the Project site, SC (Service Commercial), is intended to provide “a location for services, offices, residential, and limits retail that primarily serves local needs.” C.M.C. 17.14.010(B)

• Consistent with HAA definition of “furnishing goods and services primarily to residents of the neighborhood.”

2. City’s assertion that tenants will not comply with HAA requirements is false. Record demonstrates that Petitioners will voluntarily agree to limit the retail stores and shops to comply with HAA definition of uses allowed in a qualified “housing development project.” AR2353

• City admits in its Finding #2 that the Project is to be “occupied by unspecified tenants.”

3. Contrary to City’s assertion, underground parking does not prevent HAA from applying to Project:
• Parking is a permitted, even a required, residential use
• Does not matter if parking is commercially operated
• Underground parking is not considered a story
• Parking meets HAA’s “neighborhood commercial” standard
• Parking is not a retail store or a shop

City alleges that the underground parking is commercially operated it is not a standard of “commercial use” but “non-residential use” standard. Underground parking is not considered a story as defined by City’s zoning ordinance, City’s zoning only regulates above-ground uses.

City admits that the parking will be used by adjacent motel residents. This meets the definition of “neighborhood commercial” means “furnish goods and services primarily to residents of the neighborhood.”

There is no evidence in the record or in the Finding #17 that providing parking to the nearby motels/hotels that does not meet the need to provide “furnish goods and services primarily to residents of the neighborhood.” Only a declaratory statement.

4. City’s zoning ordinance permits as a right the land uses (e.g. art galleries, jewelry) that are alleged to be the problem.

5. City could impose conditions of approval on the uses as permitted by Subdivision Map Act, and Petitioners have already voluntarily agreed to limit the land uses to qualify for the HAA definition.

6. Subdivision map Act does not permit the City on its own to amend the City’s zoning regulations that were in effect when the application was deemed complete.

Project Meets Both Standards in HAA
• Project complies with the “applicable objective general plan and zoning standards and criteria, including design review standards, in effect at the time project application is determined to be complete”
Gov’t Code 65589.5(j)

Project would be subject to HAA if it only fit the definition set forth above regarding housing developments. Project is also subject to HAA because it meets the other standard set forth in Gov’t Code 65589.5(j).

City Denied Project in Violation of HAA As it Required “objective general plan and zoning standards”
• Government Code section 65589.5(j) provides:
• (j) When a proposed housing development project complies with applicable, objective general plan and zoning standards and criteria,
including design review standards, in effect at the time that the
housing development project's application is determined to be
complete, but the local agency proposes to disapprove the project or
to approve it upon the condition that the project be developed at a
lower density, the local agency shall base its decision regarding the
proposed housing development project upon written findings supported
by substantial evidence on the record that both of the following
conditions exist:

• (1) The housing development project would have a specific, adverse impact upon the public health or safety unless the project is
disapproved or approved upon the condition that the project be
developed at a lower density. As used in this paragraph, a "specific,
adverse impact" means a significant, quantifiable, direct, and
unavoidable impact, based on objective, identified written public
health or safety standards, policies, or conditions as they existed
on the date the application was deemed complete.

• (2) There is no feasible method to satisfactorily mitigate or
avoid the adverse impact identified pursuant to paragraph (1), other
than the disapproval of the housing development project or the
approval of the project upon the condition that it be developed at a
lower density.

City Denied Project in Violation of HAA
• Denial of project subject to HAA must have been based on “applicable, objective general plan and zoning standards and criteria, including design review standards, in effect when the housing development project application is determined to be complete…”
Gov’t Code 65589.5(j)

• Denial based in part on finding #4 and finding #14. However, these findings cannot be used to deny the Project as these findings are based upon subjective, general plan and zoning standards and criteria.
See Finding #4 and Finding #14

Finding #4 Is Based on Subjective, Not Objective, Criteria
• City admitted: “the three applicable policies are an expression of intent.” AR2341.

• City admitted: the three alleged inconsistent General Plan policies are not violated. AR2248, 2340.

• City admitted it seeks to allow “the City discretion to use the intent of the policies in the General Plan/coastal Plan as a basis for its discretion.” AR2248, 2341.

• The Project is a mixed-use project, as encouraged by P1.62 and O 3-6. AR0628.

• The City General Plan encourages but does not require mixed land uses that create second floor apartments. “Second floor housing over first floor commercial uses” is merely a parenthetical phrase.

• City cannot cite to the current Housing Element; only the Housing Element in effect when Project application was deemed complete

• Project meets current Housing Element

Finding #14 alleges that the “low number of dwelling units in the project fails to meet the intent of the City’s policies and ordinances regarding density and would impede attainment of the housing targets in the adopted certified General Plan Housing Element.” The evidence that the City cites for support of this finding #14 is the current Housing Element of the General Plan and zoning ordinance density provisions.

Current Housing Element does not even include the Project site as a site to provide affordable housing. How could the Project “impede attainment of affordable housing targets” if voluntarily providing these two units? Petitioners have voluntarily propoosed providing City up to 11% of the City targets affordable units on a site not even included in the City’s inventory of lands for affordable housing.

• City’s Zoning Ordinance and Housing Element have no minimum residential density. Density is a range between 0-22 dwelling units per acre. There is no threshold of 22 dwelling units per acre in any city general plan, ordinance, regulation, or policy.

• City’s current Housing Element states commercial districts allows for residential units “on the ground floor" and “underground parking.”

• City’s certified Amended EIR states that having residential uses on the ground floor does not violate the General Plan: “through the Design Review and Use Permit Process, the Planning Commission can determine the appropriate allocation of retail and residential space that will make these shops viable and comply with the intent of the General Plan policies on mixed use project quoted above.”
AR2502, Amended EIR, Section 3.5, pp. 2-13.

• City cannot require the Project to be “developed at a lower density” by removing the Project’s proposed ground floor residential units, nor deny the Project based upon “subjective design review criteria” unless City makes the written findings stated in HAA, subd.(j), (1) and (2).

Requested Incentives Cannot Be Basis for Denial, so finding #5 and Finding #13 Are Not Supported
• Petitioners agreed to amend the Project design
AR2359-2360, 2502.

• Petitioners can easily redesign the Project to retain the two trees by deleting one of the underground parking spaces
AR2327-2328.

• The number of condominium/rental unit issue can be addressed by a subdivision map condition of approval/legal documents as to ownership.
AR2327-2328.

• City’s action violates public policy.

• SDBL states cannot use granting of incentives as requiring a general plan or zoning amendment or LCP amendment Subd.(j).

The City has based its denial of the Project in part upon the Petitioners’ requested State Density Bonus Law (“SDBL”) concessions/Incentives. Findings #5 and #13.

City Failed to Make Required Findings to Deny HAA Project - Second Standard
• If any city, county, or city and county denies approval or imposes restrictions, including design changes, a reduction of allowable densities or the percentage of a lot that may be occupied by a building or structure under the applicable planning and zoning in force at the time the application is deemed complete pursuant to Section 65943, that have a substantial adverse effect on the viability or affordability of a housing development for very low, or moderate income households, and the denial of the development or the imposition of restrictions on the development is the subject of a court action which challenges the denial, then the burden of proof shall be on the local legislative body to show that its decision is consistent with the findings as described in subdivision (d) and that the findings are supported by substantial evidence in the record.
Gov’t Code 65589.5(j).

City Failed to Make Required Findings Under Gov’t Code 65589.5(d)
• City argues that it meets 2 statutory exemptions, 65589.5(d)(3) and (5).

• (d)(3) does not apply:
Requires citation to “specific State law” but City only cited its own LCP

Only “specific State law” cited is the entire Public Resources Code

No evidence in Finding #20 that “there is no feasible method to comply without rendering the development unaffordable to low- and moderate-income households.”

• (d)(5) does not apply:
It is not cited in the City’s Findings

City misinterprets its meaning

The City alleges that it complied with subd (i) because the City’s action is within two statutory exemptions of the HAA, (d)(3) and (d)(5). City’s Brief, 31:13-14. If subd. (i) standard did apply, City failed to meet the standard. See Finding #20.

LCP is a city adopted plan (admitted by City in its brief, pg. 23-25 “...Local Coastal Program has been adopted as part of the City’s General Plan."), not a “specific state law.”
There is no specific state law requiring that Project preserve two trees or have at least a 1:1 ratio of rentals/condominium.

Petitioners and court are not required to guess what is the “specific state law.” As stated in finding #20, City cannot cite to entire Public Resources Code, including CEQA, as it is not a “specific state law’ as it makes no sense to have HAA include DEQA mandate as to what is “specific adverse impact” and then allege CEQA is the "Specific state law” which has a completely different definition of what is a “specific adverse impact.”

(D)(5) - (1) Not cited in the Findings anywhere.

(2) If anything, this provision supports Petitioners because it states that a city cannot disapprove or conditionally approve a project if the project is proposeed on a site that is available to very low-, low-, or moderate-income households, so long as project density is consistent with the City's Housing Element. Gov't Code 65589.5(d)(5)(A). Project density is between 0-22 units per acre.

(3) "A) This paragraph cannot be utilized to disapprove or conditionally approve a housing development project if the development project is proposed on a site that is identified as suitable or available for very low, low-, or moderate-income households in the jurisdiction's housing element, and consistent wiht the density specified in theo housing element, even though it is inconsistent with both the jurisdiction's zoning ordinance and general plan land use designation."

City Denied Project in Violation of SDBL
• Petitioners qualified for SDBL incentives:
• “(b) A city, county, or city and county shall grant a density bonus and incentives or concessions described in subdivision (d) when the applicant for the housing development seeks and agrees to construct at least any one of the following:

• (1) Ten percent of the total units of a housing development for lower income households, as defined in section 50079.5 or the Health and Safety Code.”
Gov’t code 65915.

Petitioners Are Entitled to the 2 Incentives
• SDBL states that the granting of the concession/incentive “shall not be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval. This provision is declaratory of existing law.”
Gov’t Code 65915(j).

• The City’s interpretation violates public policy.

The City based its refusal to grant the incentives on its assertions as they would violate the City’s zoning ordinance and/or that Petitioners had to request a density bonus to qualify for the affordable housing incentives. See Finding #16

The City could deny any affordable housing project based upon the applicant’s reasonable request for incentives/concessions merely because the applicant’s requested incentives/concessions would “violate” the City’s zoning ordinance or local coastal plan. Government Code section 65915(j) does not allow the City to issue a finding of zoning violation/LCP based merely upon Petitioners’ request for two incentives that must be “granted” by the City,

City Denied Petitioners’ Requested Incentives – Violating SDBL
• City failed to make written findings as required by subd. (d)(1):
• (d) (1) An applicant may submit to a city, county, or city and county a proposal for the specific incentives or concessions that the applicant requests pursuant to this section, and may request a meeting with the city, county, or city and county. The city, county, or city and county shall grant the concession or incentive requested by the applicant unless the city, county, or city and county makes a written finding, based upon substantial evidence, of either of the following:

• (A) The concession or incentive is not required in order to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c).

• (B) The concession or incentive would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low- and moderate-income households.

Gov’t Code 65915

City Denied Project in Violation of SDBL
• Project is clearly within the residential density permitted by the city’s zoning ordinance and more than 20% of the residential units are being dedicated to affordable housing.
See C.M.C. 17.14.030, AR2104, Gov’t Code 65915(d).

• City improperly required Petitioners to first seek a particular incentive, a density bonus before the City would grant Petitioners’ two requested incentives/concessions.
AR2373, Finding #16

• The applicant, not the City, determines what incentive (including the density bonus) applicant needs to make the project feasible.
Gov’t Code 65915(d)(3).

• If the findings critical to the city’s decision are based upon erroneous legal assumptions, then the decision must be vacated.
City of Marina v. Board of Trustees of the California State University (2006) 19 Cal.4th 341, 355, 365-366.

HCD Letter to City Regarding SDBL
• “...an applicant is not required to request both a density bonus and a concession in order to be eligible for the other. Interpreting the stature to require a developer to request both a density bonus and a concession or incentive is clearly inconsistent with subsections (b) and (g), and is further contradictory to the intent of the law. This is particularly true when the requirement to incorporate the additional bonus units would jeopardize project feasibility.”
HCD Letter to City, dated July 10, 2008, AR1584

Res Judicata/Collateral Estoppel Prevent the City from Denying the Project Based on CEQA, Finding #7
• City could not revise previous findings
Finding No. 7 contradicts Original Finding Nos. 22, 27, 33, 34

City admits that its Zoning Ordinance 17.32.060, “the conclusions of the Final EIR regarding the historic status of the bank building could not be finalized until the City’s Department of Community Planning and Building took action on the matter, consistent with the procedures established in the City’s adopted Local Coastal Program.” City’s Brief p. 3, 10-13.

The City was required to make a “decision” the EIR conclusion regarding the historic status of the old bank building. That decision occurred with findings on November 7, 2008.

The City’s CEQA decision is subject to the principles of res judicata/collateral estoppel. The City’s Findings cannot be “superseded” or amended as stated in case law such as Marie Y v. General Star Indemnity Co. Dental Board made findings in a professional discipline administrative proceeding before an administrative law judge (just like the appeal hearing before the Carmel City Council concerning whether the old bank building should be placed on the Inventory of Historic Resources) that went unchallenged. Because the November 7, 2006 decision could have challenged, but was not, it must be deemed res judicata.

Res Judicata/Collateral Estoppel
• The City was required to take an “action” regarding the EIR’s conclusion as to the historic status of the old bank building. That decision occurred with findings on November 7, 2006.

• The City’s CEQA decision was whether to list the Project’s building on the Inventory of Historic Resources.

• Whether to list the Project on the Inventory of Historic Resources is subject to the principles of res judicata/collateral estoppel.

• The City’s 2008 findings cannot be “superseded” or amended.

Topanga Ass’n for a Scenic Community v. County of Los Angeles (1974) 11 Cal. 3d 506.
• Public agencies acting as nonlegislative (quasi-judicial, adjudicatory, or administrative role) bodies as opposed to in a legislative capacity, must make findings.

• The findings are the roadsigns.

• There is no presumption that a city’s decision rests upon necessary findings and that such findings are supported by substantial evidence. Rather, a public agency must expressly state its findings and must set forth relevant facts supporting them, particularly when the city bears the burden of proof.

Findings are to show the court, as well as the applicant, whether and on what basis the applicant should seek review, and how the City arrived at its destination or ultimate decision. The findings, including those made in its November 7, 2006 decision, must allow a court to logically follow the path from the evidence to the findings based upon that evidence to its final conclusion, as required by Topango Ass’n for a Scenic Community v. County of Los Angeles (1974) 11 Cal.3d 506.

Cannot have inconsistent findings.

The level of significance for the “loss of great architecture” cannot be merely based upon subjective beliefs and sentiment as these are not facts or any level of significance based upon quantitative or qualitative standard.

City Violated CEQA
• City could not meet CEQA definition of “great architecture” based upon City’s previous findings

Not great architecture: Original finding Nos. 16, 22, 27, 33, 34

Building could be demolished: Original Finding Nos. 22, 27.

Petitioners do not dispute the City’s right to regulate based upon aesthetics. Aesthetics require some standard or criteria so that the “applicant can readily discern the intent of the implementing agency.” In other words, as CEQA expects, the City needs to adopt standards and criteria for determination of “great architecture.”

The City adopted Chapter 17.32 which establishes “the purpose of the historic preservation ordinance is establish standards, procedures, and regulations to promote identification and preservation and enhancement of historic resources including buildings…that represent the unique architectural, cultural, historic and prehistoric identity of Carmel-by-the-Sea." C.M.C. 17.31.010.

If the bank building was “great architecture” the City’s regulations required the building to be listed on the Carmel Inventory of Historic Resources to be “great architecture.

The question before the City in November, 2006 was whether to include the Burde Building on the City’s Inventory of Historic Resources what would not allow demolition unless the City found otherwise.
The administrative record as stated in the November 7, 2006 findings states that the Council specifically found that the building’s architecture was not great architecture not did it warrant protection from demolition, as only buildings listed on the inventory are protected from demolition. 17.30.010.

New Finding #7 Contradicts Original Finding #34
• Original: “Based on Findings #30 through #33, above, and pursuant to the eligibility criteria for California Register of Historic Resources and the Carmel Municipal Code, the bank building does not embody distinctive characteristics of a type, period, regions or method of construction, or present the work of an important creative individual or possess high artistic value, not does it make an unusually strong contribution to history, architecture, engineering, or culture.”
AR0745.

• New: “..all support the conclusion that the building qualifies as having special character defining features that make it architecturally and visually distinctive.”
AR2203

New Finding #7 contradicts Original finding No. 33
• Original: The building is not unique. ...There are other commercial buildings within the Monterey Peninsula area, and within the City limits of Carmel-by-the-Sea, that are designed in the Second Bay Area Tradition of architecture. There are also other buildings that can be described as ‘heroic’ or ‘monumental’ within the Carmel-by-the-Sea and within the Monterey Peninsula area.”
AR0744

• New: “The Burde Building has been described as being of exceptional importance. It is a pure, original and unique example of modern architecture.”
AR2203.

CEQA Does Not Trump HAA
• Petitioners have consistently argued that they must comply with both HAA and CEQA as stated in HAA, subd.(b), contrary to Finding #18

• HAA sets a higher standard for what is “specific adverse impact” if the City denies the Project or requires a lower density. HAA, Subd.(i) and (j)

• An apparent conflict exists between two statures, the principle of harmonious construction to give effect to both.

• Give effect to all terms of the statute

Project Does Not Override LCP
• Finding #19 is incorrect, as the LCP is the city’s General Plan and its implementing mechanism is the City’s Zoning Ordinance

• Project does not violate either City’s General Plan or Zoning Ordinance as stated previously. Therefore, no LCP violations.

Conclusion
• City cannot deny the project without making findings as required by HAA

• City cannot deny the incentives provided by SDBL

• City cannot “revise” its findings to contradict November 2006 findings due to res judicata/collateral estoppel

• City’s Amended EIR violates CEQA